WASHINGTON—Iran is developing an underground military
installation in the mountains west of Tehran, according
to U.S. officials and Iranian dissidents, but the
facility's exact purpose is in dispute.

An Iranian opposition group, the Mujahedin-e-Khalq, on
Thursday told a Washington news conference that the
site, which it called Javad-nia 2, is a nearly completed
uranium-enrichment facility aimed at fast-tracking
Iran's nuclear program.

UPI/Roger L. Wollenberg
/LandovSoona Samsami points to Qom, a
known nuclear site. Dissidents claim to have found a new
nuclear facility.

A U.S. official disputed the MEK's finding that the
construction site in western Iran is nuclear, and urged
caution.

"This facility has been under construction for years,
and we've known about it for years," said the U.S.
official. "While there's still some ambiguity about its
ultimate purpose—not unusual for something that's still
taking shape—there's no reason at this point to think
it's nuclear. The Iranians put military stuff in
tunnels, too."

The MEK said the facility is 85% complete and adjoined
to a major Iranian military garrison. The dissidents
said they didn't believe that cascades of centrifuges,
which are used to produce nuclear fuel, have been
introduced to the mountainous site. But they said that
three halls to house the centrifuges have been built and
that the Iranian government has spent roughly $100
million developing the facility.

"This type of work has gone undetected and is
expanding," said Soona Samsami, an MEK representative.

The MEK has played a significant role in recent years
exposing some of Iran's covert nuclear activities. In
2002, it disclosed the existence of Iran's nuclear
installations in the cities of Natanz and Isfahan.
Subsequent investigations conducted by the United
Nation's nuclear watchdog, the International Atomic
Energy Agency, verified the MEK's claims and set off the
international community's current standoff with Tehran
over the nuclear program.

Independent nuclear experts said the MEK's information
was plausible given Tehran's public claims that it is
preparing to build 10 new enrichment plants at
underground sites in the coming years. Last year, Iran
acknowledged to the IAEA that it had been building a
covert uranium-enrichment facility outside the Iranian
holy city of Qom.

Still, the experts said the satellite imagery provided
by the MEK on Thursday was inadequate for verifying the
presence of a new enrichment site. They noted that Iran
is developing underground facilities at a number of
locations inside Iran, many of which are believed to
have military, but not nuclear, purposes.

"It's conceivable this is a nuclear site, as Tehran has
announced it would build new enrichment facilities
underground," said Paul Brannan of Washington's
Institute for Science and International Security, which
is focused on combating nuclear proliferation. "But
without knowing what's exactly inside those tunnels,
it's impossible to verify."

A spokesman for Iran's mission at the U.N. didn't
respond to messages seeking comment.

The U.S. State Department has designated the MEK a
terrorist organization for assassinating U.S. officials
inside Iran during the 1970s.

The organization also collaborated with Iraqi strongman
Saddam Hussein to launch military strikes against Iran's
theocratic government. The MEK is currently contesting
the U.S. government's terrorist designation in a
Washington district court and says it gave up its armed
struggle in 2001.

U.S. officials acknowledge that the MEK has provided
useful information in the past. But they also say some
of its information has been inaccurate or exaggerated.
Iran insists its nuclear program is purely for civilian
purposes.

The IAEA released a quarterly report this week on the
status of Iran's nuclear program and criticized Tehran
for limiting the access of the Agency's inspectors. The
report stated that Iran has failed to answer questions
concerning its alleged efforts to develop nuclear
warheads and triggering devices. And the report said
Iran continues to expand its production of nuclear fuel,
though not as quickly as some Western intelligence
agencies had projected.

Mr. Brannan and other nuclear experts say the IAEA
should be pressing Tehran to allow access to the
underground facilities currently being developed. They
said that the facility cited by the MEK on Thursday
might not be nuclear, but others could be.

—Siobhan Gorman contributed to this article.
Write to Jay Solomon at jay.solomon@wsj.com

Jafarzadeh has revealed Iran's terrorist network in Iraq and
its terror training camps since 2003. He first disclosed the
existence of the Natanz uranium enrichment facility and the
Arak heavy water facility in August 2002.

The Iran Threat: President Ahmadinejad and the Coming Nuclear Crisis by
Alireza Jafarzadeh